I need to generate some traffic for a internet startup and have been brainstorming ideas. My budget is limited, so I came up with the idea to give money to people who follow my startup on twitter. Not much, but possibly give $1 to $5 to one randomly selected twitter follower each day. Some days maybe more, depending on how it goes.
Has this type of marketing been done before? Would you recommend it? Would Twitter allow it?
The type of your planned campaign is sweepstake. There has been a lot, and Twitter generally allows it with some guidelines(for both contests and sweepstakes): http://support.twitter.com/articles/68877-guidelines-for-contests-on-twitter Though allowed, I don't recommend it. Reasons:
Some ideas just for your reference
I agree with Billy Chan. This strategy isn't going to produce any results for you. It will end up being a waste of time.
You state that your goal is to generate traffic to your site. But this isn't going to do it. If you get any people to follow you based on this, they won't be the least bit interested in engaging with you. They will just be interested in the money, so it's not going to generate any traffic to your site.
Additionally, a chance to be randomly selected to win $1 to $5 is about as weak an incentive as I can think of. A guaranteed $1 to $5 prize is already a super weak prize, but now you're reducing that even more by not even guaranteeing that miniscule amount. I seriously doubt you'll get anyone to bite with such a weak offer.
Plus consider that it's not just the prize money that it's going to cost you. The overhead associated with setting up and managing the contest will cost you more than the prize itself.
No! I run a social media marketing company and one of my clients got somewhat results, around 300 followers, doing that on Twitter. Then one of the followers tweeted "who got paid by __ to follow @_ _" and all her following favorited the comment.
I have seen people give away iPads, etc every month, or every follower milestone, but that just seems to get them followers who want a free iPad. Nobody cares about the message.
If you have to bribe people to follow you, you're doing something wrong, IMHO, although of course, YMMV.